SAINT PAUL, MINN. – The Agricultural Utilization Research Institute (AURI) released new research and resources aimed at boosting the prospects of regional and local meat processors in the Upper Midwest (defined as Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin). The organization’s final report is the culmination of a partnership between AURI and the US Department of Agriculture’s Agricultural Marketing Service (USDA-AMS).

AURI produced five reports and summary briefs covering financial barriers, cold storage capabilities, industry benchmarking, waste-reducing approaches for animal hides and byproducts, a general needs assessment, as well as a Project Overview and Project Brief. As part of the effort, AURI created resources and short training videos to help processors. The purpose of the project is to spur growth in small and very small meat processors by identifying and addressing the unique challenges those businesses face.

“AURI’s cooperative agreement with the United States Department of Agriculture-Agricultural Marketing Service produced a myriad of insightful and forward-looking research and industry analysis on a host of important topics,” said Shannon Schlecht, AURI’s executive director. “We stand ready to help advise on the implementation of this work to the immediate benefit of the meat processing industry and our rural communities.”

AURI discerned several financial, technical, and operational headwinds preventing small and very small processors from achieving their full potential. AURI made several practical recommendations aimed at driving growth in this important sector. For example:

• Very small- and small-size meat processors in the Upper Midwest face facility challenges ranging from inefficient cooler and HVAC systems to a lack of space and optimal layout. AURI recommended an expansion of federal funding eligibility for upgrades to onsite cold storage for smaller meat processors and incentivize investment in commercial cold storage facilities outside of high-population centers. These less dense population areas are of interest to growing local and regional processors and would satisfy multiple market channels, according to the AURI report. 
• Small and local meat processors lack the information necessary to understand how their financial strengths and weaknesses or operations compare to others. To address this gap, AURI recommended support of a pilot program to collect data and interpret results to help local and regional meat processors benchmark their performance and inform strategic business decisions. The data would inform the creation of an industry benchmarking tool for use by local and regional meat processing businesses and financial institutions.
•  Many meat processors lack access to expertise and specialized skills to support business decisions. This dynamic necessitates support of community/technical colleges in starting butcher and meat cutting courses and technical assistance programs, such as USDA’s Meat and Poultry Processing Capacity-Technical Assistance Program (MPPTA) with designated technical assistance providers, like AURI, to create awareness and help local and regional meat processors explore new opportunities and access resources.
• Meat processors need new and innovative solutions to create economic value for animal hides and other byproducts which have seen declines in demand. To counter this trend, the report recommends developing value-added alternative uses for hides and other byproducts, such as upcycled food products, pet snacks, composting, and waste-to-energy applications that can be implemented at little or no additional capital cost.
•  A shortage of meat inspectors at both the state and federal levels exacerbate processors’ challenges in understanding complex regulations. Innovative programs will be needed to train the next generation of meat inspectors. Programs should incorporate technologies allowing for remote inspection following the USDA’s current efforts to test remote beef grading technologies.
• Finally, federal funding opportunities for meat processors need careful review, but feasibility study requirements can be challenging to satisfy. Future funding opportunities could simplify feasibility study templates for smaller processors, expand eligibility for small-scale construction projects through more favorable cost-shares or project minimums, and include custom-exempt processors as eligible applicants.

Regional and local meat processors across the United States face many of the same challenges, but solutions aren’t necessarily one size fits all, AURI acknowledged. However, Schlecht said there is no shortage of innovative solutions from which to choose.

“We collaborated with a host of talented, dedicated professionals who are ready to engage in efforts to improve the resiliency of the supply chain and create new market opportunities,” she said. “We extend our gratitude to the US Department of Agriculture and our partners and supporters across the Upper Midwest region who contributed to this important work.”